A nicely provocative article, but I think you are describing the how, not the why.

The Internet certainly led to a flowering of open source, for exactly the reasons you describe in considering Linux. It is also driving many of the most interesting developments in technology today, including open genomics (bioinformatics) and open content (blogs, Wikipedia etc.) - see http://opendotdotdot.blogspot.com/.

But as I found when interviewing all the top hackers for my book Rebel Code, the key free software programs were created because there was an exceptional individual (RMS, Don Knuth, Larry Wall, Eric Allman, Linus, etc. etc.) who had a driving compulsion to do so. Economics didn't enter into it.

Your article does, however, sum up well the dynamics that are likely to ensure that open source will eventually prevail in the long run.